Judge rejects HMC-Pinnacle injunction

A federal judge in Harrisburg on Monday denied an injunction, sought by state and federal regulators, to stop the merger of Milton S. Hershey Medical Center and PinnacleHealth System.

U.S. District Court Judge John Jones denied the request by the Pennsylvania Attorney General and the Federal Trade Commission to prevent the two health systems from merging. Jones held a hearing last month on the request for an injunction.

The trade commission and the state attorney general could choose to withdraw their legal challenge or continue to oppose integration through various legal channels, which include appealing the judge’s decision, according to a press release from Hershey Medical Center.

In the meantime, the two healthcare organizations will continue laying the groundwork for their merger under the name of Penn State Health.

“Judge Jones’ decision reinforces our long-stated position that the proposed integration of PinnacleHealth and the Milton S. Hershey Medical Center is to the benefit of patients, families, employers and our broader community,” Dr. A. Craig Hillemeier, CEO of Penn State Health, dean of Penn State College of Medicine and Penn State’s senior vice president for health affairs, said in a news release. “We remain committed to our integration plans with a focus on the people and communities we serve, as well as the many dedicated people who deliver patient care, educate our next generation of care providers, and work to shape the future of medicine.”

“We are grateful to the many employers, community physicians, commercial insurance providers, community leaders and others who have recognized the benefits of our integration and demonstrated their broad support for it,” said Michael A. Young, president and CEO of PinnacleHealth. “We look forward to continuing our work together with these key constituents as we move forward with our plans for integration.”

Under the proposed structure, Hillemeier will serve as the CEO of the new organization. Young will serve as the president and chief operating officer (COO).

The new organization will be governed by a 17-member board of directors made up of directors drawn from Penn State University, Milton S. Hershey Medical Center and PinnacleHealth System boards.

Regulators had argued that by eliminating competition between the hospitals, the agreement would result in higher prices and lower quality of care.

Formal discussions for the merger began in Nov. 2013. It has since been approved by both the Penn State Board of Trustees and the PinnacleHealth Board of Directors.

The Penn State Hershey Health System includes the Milton S. Hershey Medical Center, Penn State College of Medicine, Penn State Hershey Cancer Institute and Penn State Hershey Children’s Hospital. The center admits 29,000 patients and accepts 1 million outpatient visits each year.